Prorogation brought Parliamentary business to an end, meaning all draft legislation not passed is lost
With the prime minister’s announcement that a UK general election will take place on Thursday 4 July 2024, there was a two-day rush at the end of last week to pass draft legislation or lose it. The government had to focus on what had a good prospect of passing through the legislative procedure (with the agreement of the Opposition) in the short timeframe and sacrifice the rest – even flagship bills, such as the smoking and vaping ban.
What was the need for the rush? Parliament must be dissolved at the start of the general election campaign. This means that any unfinished business, including bills and draft secondary legislation, that has not been enacted will fall unless passed in the period known as “wash-up”. That is, the last few days before this Parliament is prorogued ahead of dissolution.
As Parliament was prorogued on Friday 24 May 2024, with its eventual dissolution taking place on Thursday 30 May 2024, the wash-up lasted only two days, meaning some of the government’s legislation was lost.
What has survived?
A number of government bills and secondary regulations have made it through the wash-up period and will be become law. Of particular importance to businesses are:
Digital regulation
The Digital Markets Competition and Consumers Bill completed its final “ping pong” stage on the first day of the wash-up period. This is a significant bill. On digital markets, it establishes a new regulatory regime for businesses considered to hold “substantial and entrenched market power” in digital markets. These businesses will be subject to tailored conduct requirements overseen by the Digital Markets Unit within the Competition and Markets Authority.
It also contains amendments to competition law and merger control, including raising the thresholds for merger control and increasing the CMA’s investigative powers. Finally, it introduces significant reforms to consumer law, particularly as regards investigation, enforcement, and fining powers. Specific reforms will be introduced in various areas including fake reviews and subscription contracts. Our Insight explains more.
The Media Bill also completed its legislative passage and was signed off in the Commons on the first day of wash-up. It is a detailed bill, many years in the making. It will modernise the broadcasting regulatory regime to reflect the huge expansion of sources of media and content, while seeking to protect public service broadcasting.
It extends broadcasting regulation to certain video-on-demand services, expected to apply to services with a large UK audience and which make “TV-like” content available (potentially including those based outside the UK). It will update the listed events regime, affecting the licensing of major sports events, and will regulate the smart devices and hardware that provide access to internet-delivered TV and radio services. Our UK Media Bill hub explains more.
Dispute resolution
The Draft Recognition and Enforcement of Judgments (2018 Hague Convention etc) Regulations 2024 were introduced to bring into force the 2019 Hague Judgments Convention in the UK. The Convention (already signed by the UK) in part replaces the gap left when the UK left the recast Brussels Regulation post-Brexit. However, most commercial parties will not need to rely on it because they will usually have an exclusive jurisdiction clause in their contracts.
Real estate
The Leasehold and Freehold Reform Bill has squeaked home in the final throes of wash-up. Notably, the controversial provisions relating to the capping and phasing out of ground rents were dropped. However, the reprieve for investors in ground rent income streams and their lenders is likely to be short-lived if the Labour Party forms the next government, as it has stated its intention is to reintroduce the necessary legislation at the earliest opportunity.
Leaseholders will welcome the changes that made it into law, which include the reform of lease extensions, enfranchisement and service charges, and the abolition of leaseholds for new houses. Throughout its parliamentary journey, the bill faced widespread criticism from both opposition parties and tenant groups, who argued that the policies did not go far enough. In particular, a Labour government is likely to seek to implement the Law Commission’s recommendations for the complete replacement of the leasehold tenure (which remains the norm for newbuild flats) with the relatively unknown commonhold.
Sanctions
The Sanctions (EU Exit) (Miscellaneous Amendments and Revocations) Regulations 2024 will widen the type of sanctions that can be imposed in relation to a number of countries, including Russia. They contain new powers to disqualify someone from becoming a director or from promoting or managing a company.
Tax
The Finance (No 2) Bill introduced following the Spring Budget on 6 March 2024, includes the measures to set the charge for income tax and corporation tax (as the Finance Bill does every year), along with some of the new measures announced by the chancellor, Jeremy Hunt.
These include various Stamp Duty Land Tax measures (most notably the abolition of Multiple Dwellings Relief from 1 June 2024), the enabling power to introduce (by way of secondary legislation) a new fund vehicle – the Reserved Investor Fund, additional and extended creative reliefs and provisions dealing with collective money purchase winding up. At only 28 pages, the bill was short, largely uncontroversial and substantively progressed. In addition to some of the other main Budget announcements (the 2% cut in National Insurance Contributions and the increase in the VAT registration threshold) already having been legislated for separately, it was not surprising that the bill was included in the wash-up.
As the majority of the measures in the bill had a specified start date (many from April 2024) the acceleration of Royal Assent will not affect them.
The flagship announcement in the Budget – the reform of the non-dom regime – remains unaffected as those provisions did not feature in this bill. It is possible, should Labour form the next government, that the final form of the new non-dom regime (which it is likely to adopt for its first budget) may differ from that announced in the Spring Budget 2024.
What has fallen?
The short list of surviving legislation means that a number of important bills (both government and private members’ bills) and swathes of secondary legislation did not survive the wash-up period. Government bills of particular importance to businesses that were dropped are:
Digital regulation
The Data Protection and Digital Information Bill – this was not included in the wash-up process and will not become law. This third piece of digital regulation covered three major areas.
It would have reformed the data protection regime with post-Brexit changes to the UK General Data Protection Regulation and the Data Protection Act 2018, reducing some of the regulatory burden on businesses. It would also have created a statutory basis for new “smart data” regimes in different sectors. Finally, the DPDI Bill would have put digital identify verification services onto a statutory footing and introduced regulation of providers of these services. Our Insight has more detail on how the DPDI Bill would have amended data protection law.
Dispute resolution
The falling of the Arbitration Bill will be a disappointment to the English and international arbitration communities. The Law Commission started its project two years ago to reform the Arbitration Act 1996, to bring in changes designed to ensure that London remains one of the most popular arbitral seats worldwide. The Law Commission may push the new government to bring reform of the Arbitration Act to fruition.
The failure of the Litigation Funding Agreements (Enforceability) Bill to make it through wash-up means that the Supreme Court’s decision in PACCAR still stands and so a large amount of litigation funding agreements entered into before August last year are potentially unenforceable. This issue was considered to be a priority by the government because it was seen as potentially being a bar to mass litigation brought by individuals against large companies – such as the recent Post Office litigation. This bill was mostly seen as uncontroversial and therefore its objectives may be pursued by the next government.
Health and safety
The Terrorism (Protection of Premises) Bill, commonly referred to as Martyn’s law and developed in response to the Manchester bombings, had not been introduced to Parliament and did not get swept up in the wash-up period. It is not clear whether a newly elected government will choose to pursue it, however, the significant support behind this bill provides some hope that it might come back on the next government’s agenda. Additionally, the recently concluded consultation on the standard tiers could provide valuable insights for the new government to make amendments to improve the draft legislation.
Products
The Tobacco and Vapes Bill intended to create a smokefree generation and tackle youth vaping also did not make it through the wash-up period and will also fall away. Whether it gets resurrected by a new government remains to be seen.
Real estate
The Renters (Reform) Bill also fell. Reforms to the private rental sector have long been a source of speculation. This bill followed the government’s June 2022 white paper, which implemented proposals from its 2017 white paper. Almost seven years since this date, it recently had its second reading in the House of Lords, so tenant groups will be dismayed that it has not survived the wash-up period.
The new government will be under pressure to deliver on the policy objectives of this bill, namely, to deliver a fairer private rented sector for landlords and tenants. If reintroduced, it is likely that the key policy aims will remain – abolition of assured shorthold tenancies and the section 21 (“no fault eviction”) process. However there are likely to be debates around key details (including changes to possession grounds) and the timings of implementation. So far, Labour has indicated its strong preference for immediate implementation of the abolition of the section 21 process and assured shorthold tenancies, as opposed to waiting for court reform.
Osborne Clarke comment
Although a number of bills and a considerable amount of secondary legislation did not survive the wash-up period, it is possible that the next government will pursue some of the same policy objectives. These would have to be introduced as new bills or regulations and begin the Parliamentary process afresh. The new government is not obligated to pick up draft legislation that did not make it through wash-up and, if it does, it could make substantial changes based on its own objectives.
After wash-up and prorogation comes the dissolution of Parliament on Thursday 30 May. At this point, all House of Lords business ends and all seats in the House of Commons become vacant. There are no set dates for party manifestos to be launched as this is decided by the parties. The recent trend has been to push the publication date nearer to the election date.
The government remains in power after the dissolution of Parliament and ministers continue to be in charge of their departments. However, there is a pre-election period of sensitivity, during which the government, ministers and civil servants exercise caution in making announcements that could affect the election campaign – customarily, ministers do not announce any new or long-term initiatives.
The new Parliament will meet on Tuesday 9 July 2024, which will see the election of the new Speaker of the House and the swearing-in of MPs. The State Opening of Parliament and a King’s Speech setting out the new government’s agenda for the coming Parliamentary session will follow on Wednesday 17 July.
